GameStop Shares Surge on News of Major Acquisition Plan, CEO Cohen Hints at 'Transformational' Deal
GameStop Corp. (NYSE: GME) saw its shares climb 4.78% on Friday, closing at $23.88, following the company's announcement of a planned billion-dollar acquisition. Investors reacted positively to the news, which CEO Ryan Cohen suggested could be a pivotal step in the company's ongoing transformation.
In an interview with CNBC, Cohen was cryptic but emphatic about the scale of the deal. "It's going to be really big. Very, very big," he stated, acknowledging the high-stakes nature of the plan by adding it could be seen as "genius or totally foolish." He declined to name the target company but framed the acquisition as "transformational not just for GameStop, but ultimately, within the capital markets."
The move aligns with ambitious performance targets set for Cohen earlier this year. His equity incentive package is structured to pay out only if GameStop achieves a $100 billion market capitalization and $10 billion in EBITDA—a lofty goal for the company once at the center of the 2021 meme-stock frenzy.
Since taking over as CEO in September 2023, Cohen has focused on cost-cutting and improving profitability. The strategy has shown early results: for the third quarter of last year, GameStop reported net income of $77.1 million, a significant increase from $17.4 million in the same period a year prior.
Market Analysts and Observers React:
"This is a bold, all-in bet from Cohen," said Michael Torres, a retail sector analyst at Crestwood Advisors. "The market reaction suggests investors are willing to give him leash based on his track record of streamlining operations, but the lack of details is a major risk factor."
"It's pure theater," countered Lisa Hammond, an independent trader and frequent market commentator. "Vague promises of a 'transformational' deal? We've seen this script before. This feels like an attempt to reignite speculative momentum without substantive details. Shareholders should be deeply skeptical."
"As a long-time GME holder, I'm cautiously optimistic," shared David Chen, a software engineer and retail investor. "Cohen has delivered on profitability so far. If this acquisition can truly diversify their revenue beyond physical game sales, it could be the next chapter."
The announcement marks the latest volatile chapter for GameStop, as it continues its attempt to pivot from a brick-and-mortar video game retailer into a broader, digitally-focused entity. The specific target of the acquisition and how it will be financed remain key questions for investors.
Photo by Eren Li on Pexels
Disclosure: This analysis is based on public statements and filings. It is originally adapted from a report by Insider Monkey.